Maheshwari, The Economic Times
Bengaluru, 14 September 2015
Online grocers are working on shortening their delivery time to less than two hours by building more delivery points or roping in more partner stores in a bid to attract consumers who prefer quicker kiranas to waiting for delivery of online orders.
Companies such as BigBasket, PepperTap, ZopNow and Localbanya say time and convenience are driving more sales for online groceries, unlike deep discounting that has helped apparel or durables segment. In fact, if consumersdon’t get their orders on the same day, the order dropout rate could be as high as 50 per cent, industry experts said.
"In general ecommerce segment, the price differentiation is so high that the consumers are ready to wait as they won’t get such an option outside. But in our case, if we don’t deliver it when consumers need, they will go to the next kirana store even if there is Rs 20 discount on our site," said Mukesh Singh, cofounder of ZopNow.
Getting daily household, food and personal care products delivered at short notice needs investments and partnerships with a host of players.
ZopNow, which is present in five cities, is in talks with various supermarkets chains for tieups to shorten its delivery time while Amazon India, which started Amazon Kirana services in March, plans to rope in more kiranas to reduce its delivery time to 2-4 hours.
BigBasket, which recently acquired Bengaluru-based hyper local delivery startup Delyver, introduced one- hour delivery service in Gurgaon last week.
"There is a part of the basket that the customer buys on a higher frequency basis. These are smaller order values and these can be delivered efficiently through Express delivery," said Vipul Parekh, chief finance officer at bigbasket.com.
Gurgaon-based PepperTap, which offers two hour delivery service, plans to reduce the time to one hour by next year. "We are working on a technology which will help us crunch the whole process, from picking up to delivering the product," said Navneet Singh, CEO at PepperTap that currently operates in seven cities.
Mumbai-based Localbanya, which offers deliveries on the basis of time slots, also introduced two to three-hour delivery service in five cities two months ago. However, it does not plan to crunch the time any further.
"The issue is that most of this is done on a bike and hence, there is a limit to how much a biker can take along and how much orders we can accept for a particular time. Hence, we will not reduce the time any further for now," said Karan Gonsalves, head of marketing at Localbanya, which is present in six cities.
Despite these companies’ efforts to reduce delivery time,
some experts say replacing local grocers still remains a huge
challenge for online grocers. "Over the years, grocers have
built a relationship with their customers. All you have to do
is call them up and they will deliver the products to you in 30-35
minutes," said Devanghsu Dutta, CEO at Third Eyesight. That
kind of service would be hard for any online grocer to match.
(Published in The Economic Times.)